Indonesian Continues Reforms to Business Process

Indonesian Continues Reforms to Business Process
Estimated Reading Time: 3 minutes |

After moving up 15 places in the World Bank’s annual ease of doing business report for 2017, Indonesian authorities are determined to maintain the momentum, introducing additional reforms to ease the business process in Indonesia.

In the latest moves aimed at cutting the red-tape associated with business registration and operation the Indonesia Ministry of Trade has introduced two changes aimed at making life easier for Indonesian business owners.

Effective February 23 businesses will no longer need to renew their Trade Business Licenses (SIUP), while Company Registration Certificates (TDPs) will be able to be renewed online free of charge using a single form.

Under the Indonesian Trade Regulation number 36/M-DAG/PER/9/2007 all trading companies, except micro-sized companies, are required to register for SIUP and obtain a TDP. Prior regulations required annual renewal of the SIUP and for the TDP to be  renewed every five years.

Changes Reflect Government Policy

Indonesia's Ministry of Trade introduces the latest reforms aimed at making doing business in Indonesia easierJohn Le Fevre
Indonesia’s Ministry of Trade introduces the latest reforms aimed at making the business process in Indonesia easier

The paper work and fees required for both were considered a hindrance to the business process according to Indonesian Trade Minister, Enggartiasto Lukita, who said the elimination of the SIUP renewal simplification of the TDP renewal followed the reform policies of the government in lowering barriers to the efficient pursuit of business in Indonesia.

In last year’s Ease of Doing Business Index Indonesia was among the top ten countries globally whose ranking improved due to streamlining business registration and operation processes, moving from 106th in 2015 to 91 last year (See: Ease of Doing Business: Indonesia Leads the World in Reforms).

Whereas once it took 47 days to start a business in Indonesia, as of late last year this had been cut to 22 days. Among the major improvements introduced last year was the creation of a single document to register and obtain a TDP, and a SIUP. These latest measures take that one step further.

Welcome the changes Adhi Lukman, chairman of the Food and Beverages Association (GAPMMI), told the Jakarta Post ‘this is good because it will free us from unnecessary costs because the permits [SIUP] will be valid forever, except if a business closes down

Since President Joko Widodo took office in 2014 Indonesia has undergone remarkable economic reform as he strives to bring the country’s ease of doing business ranking down to below 40th place globally, which would place it marginally ahead of Thailand’s rank in last year’s index, and well ahead of Myanmar, Lao PDR, Cambodia, the Philippines, Vietnam, and Brunei.

Government ministers who fail to introduce policies aimed at streamlining the Indonesia business process have been told they risk being replaced.

 

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Leakhena Khat

Leakhena Khat

Junior Journalist at AEC News Today
Leakhena is a junior journalist at AEC News Today who is also currently studying International Relations, which she finds adds perspective to her work reporting on the Asean Community."I love what I am doing so much as it gives me a lot of great experience and provides challenges to my mind set.
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